CGX finds ‘sweet crude’ in Corentyne Block

– yet to determine commercial viability

Canadian-based oil major CGX Energy Inc has announced that it found sweet crude oil during its exploration activities in the Corentyne Block offshore Guyana, but the commercial viability of this find is yet to be determined.
In an update on the Wei-1 Well operations on Wednesday, CGX said the well has encountered multiple oil-bearing intervals in the western channel fan complex of the northern portion of the Corentyne block in formations of Maastrichtian and Campanian ages.
“A comprehensive logging campaign in the Maastrichtian interval indicated the presence of medium sweet crude oil of 24.9 API (American Petroleum Institute gravity). Downhole fluid analysis confirmed light sweet crude oil in the Campanian interval,” the oil company stated.
It further said that logging while drilling (LWD) and cuttings indicated the presence of hydrocarbons in the upper portion of the Santonian, but fluid samples have not yet been obtained. However, core samples will be attempted in the Santonian interval when drilling resumes.
CGX, however, said it is unsure of the commercial viability of these finds.“It is not yet certain that the hydrocarbons encountered to date in the Well are yet sufficient to underpin commercial development on the Northern portion of the Corentyne block,” the Canadian oil company said.
The Wei-1 Well is being drilled by CGX and its joint venture partner Frontera Energy Corporation, which holds the majority interest in the Corentyne Block of 68 per cent. CGX holds the remaining 38 per cent of participating interest.
The JV Partners expect the Well to be completed within the original timeframe announced back in January; that is, four to five months after spudding the Well.
This, according to CGX, is despite operations being interrupted when a wireline fluid sampling tool became stuck in the Well and was not recovered. Nevertheless, an open hole sidetrack will begin shortly from below the last casing point, and will progress to the planned total depth.
There was a delay in spudding the well after the rig contractor, Noble Corp Plc, was tied up in contractual obligations in Trinidad. Frontera and CGX were initially scheduled to begin drilling the well by November 27. Instead, drilling commenced on January 20, 2023 using the Noble Corp Discoverer semi-submersible mobile drilling unit.
As drilling operations continue, this delay has resulted in the Well’s total cost estimates increasing to approximately CAD$175 to $185 million in order to successfully reach the target total depth, complete the anticipated logging runs, and complete the well.
CGX has said it is required to fund its 32 per cent interest, after partner carry, of approximately CAD$11 to $15 million, and is currently assessing strategies to fulfill this obligation.
The Wei-1 Well is planned to be drilled to a total depth of 20,500 feet, and to date has been successfully drilled to a depth of 19,142 feet.
Wei-1 is one of two wells in Guyana’s Corentyne Block that the companies have committed to drill. The other well, Kawa-1, struck light oil and gas condensate in May 2022, though the companies had not said how much oil was found, or whether it was commercially viable. The Wei-1 well is located approximately 14 kilometres northwest of the Kawa-1 discovery.
The JV Partners had also announced in January that the Guyana Government has approved an appraisal plan for the northern section of the Corentyne Block, which commenced with the Wei-1 well.
“Following completion of Wei-1 drilling operations, and upon detailed analysis of the results, the joint venture may consider future wells, as per its appraisal programme, to evaluate possible development feasibility in the Kawa-1 discovery area and throughout the northern section of the Corentyne Block,” it said.
It further stated that any future drilling is contingent on positive results at Wei-1, and that the joint venture has no further drilling obligations beyond the Wei-1 well.
At the time, Executive Co-Chairman of CGX Energy’s Board of Directors, Professor Suresh Narine, said the Wei-1 will appraise both the Kawa-1 discovery as well as explore additional opportunities within the Corentyne Block.
“The Wei-1 well is on-trend, and well positioned for success with both Kawa-1 and recent peer discoveries immediately adjacent to the northern section of the Corentyne Block. The joint venture is grateful for the Government of Guyana’s ongoing support as we worked towards spudding Wei-1 in accordance with the previously-agreed terms, and we look forward to potentially delivering another discovery for our shareholders and the Guyanese people,” Professor Narine had stated.